Size Ten State Governments Try on Size Four Wardrobes

Governors tout 'downsizing,' but critics lament decrease in services

GOV. William Weld (R) of Massachusetts wants to slash state Cabinet posts in half and eliminate almost 100 boards and commissions. Minnesota's governor wants to do away with one whole branch of the legislature. California is scrutinizing every service the state offers, looking for ways to trim.

More than anytime in a quarter century, America's 50 states are moving to tighten the belt. Besides lopping off personnel and agencies, new downsizing buzzwords are popping up almost daily. State-owned buildings, airports, and warehouses are going on the auction block.

While Washington has taken some modest steps toward shrinking the size of government, many states are quietly revolutionizing the way they do business - boosting efficiency but also laying off thousands of workers and stirring debate over what is an essential government service.

The trend is being driven to a certain extent by the expectation of less aid coming from Washington and the need to do more with less. But it also reflects a response to fist-pounding citizens who have had it up to their chins with waste and mismanagement.

''Since the reinventing government movement ignited in the early 1990s, there has always been a tension between those who wanted to merely cut government and those who wanted to remake it better,'' says Don Kettl, professor of public affairs at the University of Wisconsin in Madison. Since the Republican revolution of November 1994, he says, ''the cutters are winning out.''

Whoever is winning, changes are being instituted. Idaho, Michigan, North Dakota, Rhode Island, and Nebraska are consolidating state services. Hawaii is planning to simplify its civil-service appointment procedures.

Georgia has created a bipartisan privatization committee to search out ways that nongovernmental bodies might be able to provide services cheaper.

The Midwestern states of Wisconsin, Michigan, and Ohio are taking the lead in streamlining welfare rolls with new formulas limiting eligibility. New York and New Jersey are taking high-profile looks at across-the-board cuts in all service agencies. Oregon, Washington, and Florida are targeting child and family-service agencies for greater flexibility.

''Any [measure] that requires fewer state employees - some obvious, some not - it's on the table,'' says Arturo Perez, an analyst for the National Conference of State Legislators in Denver.

The pressure to downsize is only likely to grow. If Washington enacts a seven-year plan to balance the federal budget, state leaders worry that they could feel the pinch in three or four years. The states, says Eric Brenner of the Council on Governors' Policy Advisors, want to be ready.

''The whole mood and tenor of federalism and intergovernmental relations is changing - and changing fast....,'' says a recent CGPA national survey. ''States are increasingly placing themselves in a 'ready position' for implementation of new devolutionary policies despite ... ever changing negotiations in Washington.''

Not all the streamlining wins applause, of course. Protests by laid-off workers have been staged from coast to coast. Hundreds of Division of Motor Vehicle employees marched on the New Jersey Statehouse last year to protest Gov. Christine Todd Whitman's planned privatization of 25 DMV agencies. Virginia environmentalists protested the planned demise of the Virginia Natural Heritage Program, which helps protect rare plants from extinction.

The flurry of downsizing might actually have been even greater except for last year's good economic performance. Twenty-two states are exceeding revenue expectations so far this year - a 10-year high. ''You don't do wholesale reform in a good year,'' says David Liebschutz, associate director for the Center for the Study of the States, in Albany, N.Y. ''It's just human nature to procrastinate until the true day of reckoning.''

But analysts say the current cutting climate, though often politically motivated for short-term results, is just as often being built on a longer-term agenda. Many states are testing flexible approaches for welfare and Medicaid through federal waivers. And many are developing new relationships with city halls.

''Some of the hottest action in reinvented and streamlined government is happening with cities,'' says Neal Johnson of the Alliance for Redesigning Government.

Others are skeptical that the reforms constitute true rethinking. ''Some of this is a lot more heat than light,'' says Mr. Liebschutz. ''When times get tight again, it will be interesting to see what changes actually remain.''

Others say the current changes are irreversible. In Nebraska, consolidation in state agencies and management redesign will lead to major changes in how health and human services are organized and delivered, says Donald Leuenberger of the state's Department of Social Services. Noting that new information systems and better automation are already in place, he adds: ''It will be many months, even years, before all planned aspects of the new system can be fully implemented.''

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